Saturday, October 01, 2005

Get Rid of The Curve to Reduce Microsoft's Headcount

Whew, is it time bring my hands together in a "T" and call time-out? There's a bit of nyah-nyah threading itself through the comments. Part of that is probably due to the lull between significant events: the build-up here at Mini-Microsoft over the past year timed with the one-two punch of Business Week and Forbes publicly bringing forth the discontent right before the reorganization of business groups.

And then? grumbling fatigue.

A comment from Saturday morning from someone flourishing at Microsoft:

I compare us to the rest of the companies in the world I think we do darn well. I have been in the workforce for over 24 years and have worked for several companies during those 24 years. In my 6 years at MS this is the best company that I have ever worked for. I have a great manager, I like the (client) group that I support, I love the work that I do and I have been promoted because of the results that I have delivered and customer focus not my political savy. [...] Like I said, if you think that there are high tech companies that are better and will compensate you what you think you are worth, then you should probably go there. You are obviously not happy at MS and you seem to lack any faith that anything is going to change.

If you're not happy at Microsoft and don't have hope and are not rolling up your sleeves to rewire every aspect of the Microsoft daily-business engine (and get lots of scorched oil squirted on your face), you need to freshen up that resume and look elsewhere. We have a lot of shipping happiness ahead to bolster our spirits, but we need to clean our cluttered house and that's not going to be pretty or enjoyable.

The house cleaning, starting from the bottom of the organization and cascading upwards, has to happen for Microsoft to be agile and efficient and productive and to ship more often and on time. We need our own one-two punch of:

  1. Organizational flattening to reduce waste of effort, and
  2. Headcount reduction for efficiency and cost savings (and to show The Street we're committed to a leaner, efficient running of our business).

Headcount reduction. Something to think about is why Microsoft is so bad at firing people (until, cataclysmically, entire groups are paved over or remade). First, firing someone for lack of performance is a terrible thing for a manager to through (and yes, it's a terrible thing to be fired). Unless as a manager you relish unleashing such misery, you're going to be resistant to it. You have to connect the dots that your poor performers are actually putting features at risk and most likely will result in the product either being buggy and slow or having less compelling features. You have to realize that you're not pleasing customers and increasing revenues and shareholder value by keeping around marginal or poor performers.

You have to get rid of your poor performers.

So you do. Let's say you get rid of a few folks over the course of a year. And since good, talented people are hard to find right now, expect those positions to still be open by the time the review model comes around. Then along comes the curve. Say you still have to provide a 25% fit for 3.0s, maybe 45% 3.5s, and 30% 4.0s. If your group is big enough, dropping a few folks didn't make a difference in the number of 3.0s you need to provide. You just screwed some of your 3.5 and, most likely, some of your 4.0 people to fit the curve.

D'oh. Where are those talking points from HR on giving hard review scores again?

Managers learn that lesson really well the first time they go through it. Better to keep low performing reports around to keep the 3.0 bucket full until you're absolutely required to flush them out. Or get some new hires to slap the "welcome!" 3.0 on. Otherwise, your high performers aren't getting the rewards you want and your eyes are twitching as you stare at that blue "Love 'Em or Lose 'Em" book on your shelf.

When Microsoft was roiling with growth, there was enough turn-over going on that the curve got lost in the noise. When we slowed and the dust settled, suddenly all aspects of the curve started to hurt, including 3.5 for people who have done great jobs. And 3.0 for people who had done better than expected. When I was at that manager meeting with HR, one lead related how his boss was ready to go on a hiring spree to help review-time compensation and morale in their group. What kind of hiring spree?

"We need to go hire us a bunch of 3.0s!"

Damn! The Microsoft manager was going out there to specifically hire poor-performers so that the rest of the people in his group could get better review scores (the HR presenter winced upon hearing the story but didn't say much). And you know those new hires didn't just go away quickly but rather settled down like a tick into Microsoft and managed their own success.

Sorry, this is indeed the bad management of The Curve when applied to Stack Ranking. This is the bad management of spoiling Microsoft with persisted poor performers that I doubt anyone has the strength to terminate. And you know that managers know how to avoid the people-review for 3.0s: how many calibration meetings have you been in when folks ruminate over the multi-3.0s and manage to get them to bob up to a 3.5 this time. The radar stops blipping.

My first thought here was to have a safe-harbor for firing people: every person you move out of Microsoft that's good attrition gets to fill one of your required 3.0s for the upcoming review model. The 3.0 bank, so to say. That sort of falls apart when you consider the next year and your bank account is empty. Then you're back to screwing people. I half like this idea. It does give managers the comfort of knowing that they are not going to trend down their really good and great performers just because they thinned their herd for the good of Microsoft and its shareholders.

So consider: if we got rid of The Curve, would it actually make it easier to move on the poor performers at any time during the year? I think so. I believe so. The Curve, for some groups, is actually causing Microsoft to stack up the dead wood so that the bottom of the Stack Rank and the bottom of The Curve are pre-filled.

 

53 comments:

Anonymous said...

Here's a little story: I wasn't performing well because I came in to a group towards the end of its ship cycle and basically had nothing to do (we were in full triage lock-down for about 6 months). I was on track for a 3.0. So I started doing informational interviews to find a group where there was work for me and where I wouldn't be screwing myself into a crappy review because of lack of work.

My manager wouldn't give me permission to interview, because -- in his words -- they needed someone to fill the bottom of the curve.

This is one example among many of how the review system is fundamentally broken. Not only does it cause tremendous loss of morale and time every September, but it screws up hiring/firing decisions every single day.

As a data point, I've got a lifetime 3.75 (even with that 3.0) over 7 years at msft. So I'm not some historical low-performer just kvetching; the curve is busted and I hope HR is listening and committed to fixing it.

Anonymous said...

When I was hired into Microsoft, a person on my team was known throughout my building as being a very "special" person. Great person, horrible performer. It took the manager in question TWO YEARS from the beginning of her horrible performance until the time she was removed forcibly from our team. Two fricking years! If it's generally acknowledged that a person is not contributing to the company or the customer, give managers more leverage to dismiss employees. Please.

The problem, of course, is that sometimes killer performers are, for whatever reason, not liked by the management structure. Some managers simply don't want to be challenged or questioned. If you give managers more leverage to dismiss employees easily, managers will inevitably misuse that to get rid of people who don't play the political game, even though they are doing amazing work. It's a tough balance.

(I have a lifetime 4.0 review score, which I mention for those of you who say that only 3.0s and 2.5s post here.)

dead wood said...

Mini, have you ever stopped to consider that some of the "dead wood" could be turned into very high performers in the hands of better managers?

I have seen people with low performance because they needed a different management style, because they needed more training, and because they were re-orged outside of their skill area.

A little dead wood is nowhere near as dangerous as tying the hands of (or chasing off) your "most valuable resources".

As a data point, I have a 4.0, and a VP gold star under my belt, but I was trended 3.0 after a re-org and was fired for 'performance reasons'.

Now I work on a linux based product and am kicking ass with better management.

Am I the dead wood that you wanted to cut?

Anonymous said...

"Commitments" can be rationalized to one item: I'm going to do what needs doing to meet (and for extra credit) exceed my customer's needs.

As others have mentioned this, I'm a 3.75 average, over 5 years. To be honest, I've paid scant attention to the goals/commitments that were written down at review time, and neither have my managers. I simply did the job that needed to be done. I have a team of 9 folks now - developers and Lab Engineers - and I don't need various yardsticks by which to measure them.

Come review time, the outcome should be this:

1. You didn't do your job. Your feature wasn't completed/tested/specced (as appropriate to your discipline), and you didn't drive hard enough to get unblocked. You're on the "watch" list for performance. Cost-of-living raise only. And no, you can't move on until performance is deemed OK; too many folks "disappear into the system", unless you are plainly in the wrong job, or have an untenable relationship with your management (i.e. a personality clash - this happens a lot).

2. You did your job. You get a cost-of-living increase raise, and bonus and stock commensurate with the additional customer-focused value you provided. The managers job is to OBJECTIVELY measure the latter:
- If I found a jillion bugs, how important were they? How many did I get fixed? How many dupes?
- Am I updating my skills, and using those new skills to advantage in my work?
- Am I a team player - do I act as a catalyst for the rest of the team whereby I foster a mood that enhances productivity (Microsoft doesn't measure this)
- Do I manage my work life balance. Although that is ultimately our responsibility, as a manager, we need to look out gor "burn-out" - particularly in new college hires.

At the end of the year, everyone knows there is a pot of money for bonuses, and a quota for promotion; a pot for meit raises. Make it a slice of that! No number!

In summary, use your judgement. It should be stressed that team playing is expected, and rewarded. Gaming the system is not.

The curve is deadly, and causes huge disruption and anguish both for recipients and review-givers, for months!

Anonymous said...

You guys are lucky...I can't even get hired at MS!

Anonymous said...

Anonymous said: I wasn't performing well because I came in to a group towards the end of its ship cycle and basically had nothing to do (we were in full triage lock-down for about 6 months). I was on track for a 3.0

IMO, If you had nothing to do, and did nothing, you were performing very well. Why should you be blamed if you manager does not have work for you?

Anonymous said...

Is it just me, or does anybody else think it is sick for a guy to run around and say, hey, let's fire a whole lot of my co-workers? You do realize that performance is not genetically based, but can be influenced by something called "training" and this other thing called "good management"? You might want to look into this. Saves a lot of grief and money for all involved.

If this blog has taught me one thing, it is that I probably don't want to work for Microsoft -- not necessarily because of the company itself, but because the people working there now seem to be busy trying to slit each other's throats most of the time. How about management starts by firing those people who are busy talking about who should be fired all the time? I'm sure the shareholders would approve.

Amazing you guys get stuff out the door at all.

Anonymous said...

From a comment in the previous posting (Mini..Is that You?) "Even in the Core Wndows [sic] division, there was enough mismanagement and laziness to make me think they were all the ghetto children they complain about."


"Ghetto children"? If this poster is a manager, I wonder who he'll cut first? The people like him or the "ghetto children"?

Imagine trying to compete in a stack rank environment if you are non-white, non-Indian, or female (especially in Windows division). I'm sure that the quoted poster's thoughts are not unique within Windows and in a less anonymous environment would have been much more politically correct.....but the results of stack ranks and promotions still reflect his thinking across the board within Windows division. How can a minority MS hire that meets the same hiring bar as others compete and succeed in the cut-throat, highly political environment described in this blog? Others have generally pointed out that talent/results don't matter in the stack rank meetings. Given that, how will people fare when managing upwards won't work because your manager (at best) simply doesn't identify with you and (at worst) thinks of you as a "ghetto child".


For all of its talk, if Windows division was a stand-alone company with the same revenue, it likely would be one of the least diverse companies anywhere - especially in management. The only diversity in my old building was reflected in the Microsoft posters hanging on the walls. Windows division by itself generates enough revenue to easily be in the Fortune 500 and likely in the Fortune 100 (or close). Don't know the latest numbers but a year ago, only about 25 women were level 65 (director level) or above in Windows division.


The comments in the blog really make me think about the unsuccessful class action suit brought by black employees in 2000 saying that they were uniformly stack ranked lower and received less rewards (3.0s). How many black retirees are there from Windows division when thousands of others retired with millions? How many Black line managers have there ever been in Windows division?


Before someone posts that diversity numbers are reflective of the environment, I'd argue that there are publically traded technology companies with capable minority executives in engineering positions...Symantec for instance has a black CEO **surprise!**. If MS really wanted minorities in senior Product group positions, they'd work harder to retain the ones that they have. People have complained that promotions have slowed sigificantly and it now takes 12-15 years to get to level 63. Facts are much better than posters - less than a statistical handful of minorities are at level 63+ now in Windows after more than 20 years of being a publically traded company and historically faster promotion cycles.

Windows division is able to hide its almost complete lack of diversity in the overall Microsoft diversity numbers. MSN has large numbers of women in management and generally minorities are better represented in the field, HR, sales, and support. However, Windows division is supposed to be one of the places where the best rewards are doled out. Good minority hires tend not to stay in a place where ironically rewards are supposed to be better but reviews are lower and promotions slower.

Why is Windows division so different from other divisions at MS or other fortune 500 companies making the same revenues?

Anonymous said...

As entry into this conversation, my lifetime review score is 3.78. That said - the curve is a broken review model - period. Most of us see this and openly agree. Microsoft should be the company that figures this out better than any other company out there. We are the ones that can innovate, even in our Performance Appraisal Methodology. We need to get some great thinkers on this process - what are the goals of performance management, for Microsoft, for our employees, for our customers? We need to be open and focused on doing the BEST thing and the RIGHT thing, not the same old thing.

I understand that HR and Steve B have been in conversations about this, but Steve is not ready to retire the curve yet.

I wonder why?

Anonymous said...

What do you think we are, stupid?
No sir, we are not going anywhere.
This is one of the best companies in the world to work for, yes.
We would like it to change for good, for our benefit, sure, but if it doesn't change (which I doubt it will) we will adjust our productivity to the lowest.

We will become a company full of mediocre workers, since there is no incentive on being uber productive, and still enjoy all the benefits of working for the best software company in the world, until the time comes.

Remember, we are not assembly line workers, we are a different kind of breed, and yes, we are arrogant.

In other words, we will be sucking this tit until we get sick of it, you will put more controls and pressure on us to be more productive, creating more unrest, driving morale down the pipes, but we don't care.

Same review? Same benefits? No raises? Less productivity.
Catch me if you can.

oadfji said...

Most M$ business divisons in Redmond, WA are doomed. In a little while, all of M$ Project being developed in another country, perhaps Japan, who knows?

Anonymous said...

Even if you get rid of the curve, you are still going to have all the back stabbing you do now. 100% of your evaluation is based on individual performance.

They can barely pretend to measure individual performance. Measuring your contribution to a team or cross team effort is even more nebulous.

The other assumption is that the review score you get is accurate because somebody is using a number. Assume it is accurate for now, that is a much harder problem to solve.

The stack ranking system also doesn't have any bottom up evaluation of your manager. Management feedback does not typically have an effect on your manager's review score.

Things I would like to see:

1) If you ship on schedule, everyone on your team gets a bonus for effective team work. If you don't ship on time, no one gets that portion of the bonus. If you have someone on your team that isn't contributing, you're going to be making the air move with even more furious back stabbing because you're worried you will lose that bonus -- maybe someone in management will take a hard look sooner.

You would get a bigger bonus if you didn't have to cut most of your features to ship on time.

2) Microsoft has a lot of cash. Getting rid of the curve would be a good investment if it makes employees more productive and reduces turnover.

3) Make the management feedback from direct reports have an effect on the manager's review score at the end of the year. They will work harder to do a better job because some of the fear will be going in the other direction -- fewer people who get off on human misery will behave that way if it affects their chances for promotion and income.

Anonymous said...

"If you're not happy at Microsoft and don't have hope and are not rolling up your sleeves to rewire every aspect of the Microsoft daily-business engine (and get lots of scorched oil squirted on your face), you need to freshen up that resume and look elsewhere."

Hey Mini, if you're not management as some claim, but a real person as you claim, then why the anonymity? Do you think you'll just get the, "lots of scorched oil squirted on your face?" Or do you have a pretty good idea that you'll get the, "failure to meet performance expectations memo?"

Come on, dude, roll up those sleeves and march right into your PUMs office and tell them how to do the re-wire. Tell us how it goes.

Anonymous said...

1) If you ship on schedule, everyone on your team gets a bonus for effective team work. If you don't ship on time, no one gets that portion of the bonus. If you have someone on your team that isn't contributing, you're going to be making the air move with even more furious back stabbing because you're worried you will lose that bonus -- maybe someone in management will take a hard look sooner.

The problem is that most projects are not screwed up by the individuals on the team. Most are screwed up because of management decisions about features, or having to architect in some component from another team only to be screwed when they don't ship, or etc. There are many internal political constraints that can cause your team's project to get hosed.

Mike said...

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Anonymous said...

The problem, of course, is that sometimes killer performers are, for whatever reason, not liked by the management structure. Some managers simply don't want to be challenged or questioned. If you give managers more leverage to dismiss employees easily, managers will inevitably misuse that to get rid of people who don't play the political game, even though they are doing amazing work. It's a tough balance.

Absolutely. In my five years, I've seen around 20 people "get gone" who I knew. Of those, maybe 2 were 3.0's eventually shuffled out for performance reasons (after years). The other 18 were all 3.5's and above who ended up getting on the wrong side of the popularity contest - in many cases for trying to address real concerns either internally or vis a vis customers. Not good.

Anonymous said...

A bunch of people here are wining/moaning and bitching to your hr mamas. You expect the hr generalist ( who probably took the hr job as he wouldnt get anything else ) to step in and fix the stuff for you based on your (skewed) side of the story.

If you want to roll up your sleeve, stop the nonsense blogs and come up with an innovative feature. Take it where you can take it.

If your strength is browsing the internet and expecting vp like compensation for doing so, I think you will do a service to msft by going somewhere else

fCh said...

So consider: if we got rid of The Curve, would it actually make it easier to move on the poor performers at any time during the year? I think so. I believe so. The Curve, for some groups, is actually causing Microsoft to stack up the dead wood so that the bottom of the Stack Rank and the bottom of The Curve are pre-filled.

I would look at the Curve as being a formal instrument in the hands of management and HR bureaucracy to push away non-performers from the organization, in an era where most corporate America has become so exposed to litigation, and MSFT so litigation-shy. Someone mentioned it took a team two years to send packing a lady. Any idea about how consuming a lawsuit could have been as alternative? I could speak from experience...

So, I would think about improving the hiring process--the difficult part is that people move left/right and up/out. Secondly, a process whereby poor performers are spotted early on and given proper notice is still desired. The advantage of the Curve consists of taking the pain away from the manager's hands; "You know Joe/Rachel, you are doing fine but the damn curve doesn't allow me to ..."

I would also suggest a couple of things:

a) Managers (AT ALL LEVELS) should be responsible for achieving business goals;
b) HR should think if the Curve is indeed the best formal mechanism to maintain organizational hygiene. In one of my prior postings, I mentioned even the possibility for staff to anonymously rank their managers.

Anonymous said...

Mini, have you ever stopped to consider that some of the "dead wood" could be turned into very high performers in the hands of better managers?

I hear you, dead wood, something similar happened to me. Fact is, as long as MS hires above replacement level, they'll just view the solution of kicking somebody out as easier.

From a different comment:
And no, you can't move on until performance is deemed OK... unless you are plainly in the wrong job

That would be nice. I worked at MS in a job I didn't like or want (I wanted to code and wound up as a lead with no coding responsibilities) and was forbidden to transfer until two things happeneds: performance improved, and the product ship cycle completed. Management wasn't for me and it wore me down until I was let go. Which was fine, waiting 2+ years for the ship cycle to complete would have been hell at a job I didn't like.

Anonymous said...

Staff do get to anonymously rank their managers and the managers fear the result. That's why the Manager Feedback is done AFTER the reviews are finalized :)

Anonymous said...

""Or get some new hires to slap the "welcome!" 3.0 on"",

Love this quote, I can still feel the slap.

TheKhalif said...

Before someone posts that diversity numbers are reflective of the environment, I'd argue that there are publically traded technology companies with capable minority executives in engineering positions...Symantec for instance has a black CEO **surprise!**. If MS really wanted minorities in senior Product group positions, they'd work harder to retain the ones that they have. People have complained that promotions have slowed sigificantly and it now takes 12-15 years to get to level 63. Facts are much better than posters - less than a statistical handful of minorities are at level 63+ now in Windows after more than 20 years of being a publically traded company and historically faster promotion cycles.




Yes that is an issue I noticed in Windows. I knew some very sharp blacks who were consistently ranked at the botom een though they did more work and had better organizational skills than their managers. It's a real shame.

Anonymous said...

It's not a black or white race issue unfortunately. Racism and anti-diversity wears many hats. I just left a group where my manager hated everyone that wasn't Indian. He treated other Indians on the team like gods and was working hard to build his empire, but every white male (and what few white females we had) got derision, discrimination, hostility and in the end, "shat" on in the review. So yes...THAT can be a factor in a bad score as well.

Anonymous said...

Come on, dude, roll up those sleeves and march right into your PUMs office and tell them how to do the re-wire. Tell us how it goes.

Or better yet what score you got after that?

Anonymous said...

Just curious, how does the overall compensation work at Microsoft?
I hear lot of people complaining about review system screwing them, demoralising even the best of the smart employees.

As far as I heard, MS lowballs employees by paying them less in salary. I would guess for a SDE w/ 3-4 years of experience would be in the range of 80-85k pa.

What about the shares? Doesnt MS pay you guys shares instead of options?
Isnt that not motivating enough?

Regards

Cigamybab said...

Wazz up Great Blog

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Anonymous said...

You know, I've made money from options, etc. in the past, and I'm not about to say I didn't like it, but as far as providing motivation - I'm not so sure about the money deal. So long as I'm getting a reasonable amount of money to live on, the real motivation for me comes from working on cool projects with really good people that I can learn from. If I make a lot of money later, so much the better, but it isn't what motivates me. I'd probably have been a stock broker or a casino owner or something if money was what turned me on.

I've worked on some stuff at Microsoft that had the potential to be very, very cool, but generally the thrill was more than a little dampened by the artificial constraints put in place for what seems like political reasons. I've also worked with some really good programmers at Microsoft that taught me a few tricks, or just inspired me by putting so much pride into their work. Some of the better ones that I know have left Microsoft.

When I got started programming, there wasn't anything else I'd rather do. I remember how happy I was to discover that people would actually pay me good money for something I'd do for free if I could survive. The work, and working at being good at it are still what motivates me today. Putting a bunch of political BS between me and my work is what demotivates me. Screw Steve and Bill if they are greedy jerks (although Epicurus comes to mind, "Nothing is enough for whom enough is too little."), but I really don't care - that's a topic for Steve and Bill and their shrinks if they have any.

Anonymous said...

"Staff do get to anonymously rank their managers and the managers fear the result. That's why the Manager Feedback is done AFTER the reviews are finalized :)"

Are there any formal concequences to managers for low feedback scores? My former manager got the lowest scores in the division and he still has his job. Why?

Anonymous said...

This article is generally positive, but the lead in imo says a lot about what's currently wrong:

"I was still in my twenties when Microsoft started talking up Yukon, now known as SQL Server 2005. It was, Microsoft said, going to allow huge OLAP cubes on PC architectures and perform other minor BI miracles. Now that I'm solidly in my mid-thirties and have seen many major new versions of BI platforms come and go from the headlines, Yukon's imminent release (set for November 7) feels unreal even though Microsoft released several preview versions of the server for free download in the past year. Parts of it are still coming together: Microsoft recently announced, for example, that the promised data mirroring won't be ready for the first general release; it's now expected in 2006."

Microsoft Ups The Price/Performance Ante

Anonymous said...

It would appear that most of the comments in this blog come from the Redmond development community and I am inferring because of that are coming from men.
So as a non-developer, non-Redmond female employee (lifetime review score of 4.2) let me offer another viewpoint.

No company is perfect. This one isn't, my last one wasn't and the next one won't be. But it is a company --it's not my entire life and believe me when I say this is a much better place to work that Oracle or SAP. When I read some of these blogs I get the feeling that you are expecting the place you work to fill up every void in your life. Fellows, that is just not going to happen. Pick two or three things where you can make a positive difference and do something about it. The points you are making about the curve and the model are not "new" news.

Anonymous said...

You have to get rid of your poor performers

So how come my manager stills hang around with those brown spots on his nose while his reports have a curve painted on their faces?

Anonymous said...

Looking from the outside, I think the stack rating system is the wrong place to start. What I have gotten from reading this blog is that the problems started around 2000 or 2001 when Ballmer became CEO, and Microsoft hired a lot of new managers who weren't very good. And that in turn seems to be because Microsoft wanted to get a lot larger.

As long as there are a lot of bad managers, evluation is going to be screwed up. One thing that divides good from bad managers is the ability to tell if an employee good or not. In fact, bad managers tend to feel threatened by good employees, as they can see how the bad manager is screwing up.

This all implies that the starting place would be for Microsoft to decide to become leaner, and fire a lot of managers and developers.

Now the problem with that idea is that Microsoft's basic strategy is to develop an ever-enlarging web of interlocking monopolies. I think it expanded so much in the last half-decade because its existing monopolies had gone about as far as they could, and so it is desperately looking for the next monopoly. That is why there are so many developers working on so many projects, and so many low-quality managers. The hope is that something, anything, will be the next killer application.(The ever-expanding-number-of interlocking-monopolies strategy is also at least one reason behind "integrated innovation")

I think most of the people here are taking the wrong approach. You can't straighten things out working from the bottem up if things are fouled-up due to a big strategic decision made at the top.

Mini sort of gets this with his talk of Microsoft becoming lean and mean. But the question everyone needs to address is what business strategy goes with that. Lean-and-mean means giving up the ever-expanding-number of-interlinking-monopolies strategy, and so you have to have a new strategy.

What is the new business model? What sort of software would Microsoft have to sell? What are the markets? You have to think on that level if you are really going to reform Microsoft.

Anonymous said...

I do not want to work at any company that does not have a curve. We need to reward performance, individual performance. If our managers are not using the system correctly, lets improve the management, not get rid of the system. Frankly, we should target 10% good attrition at every level of the company, every year.

10% of the VPs get the boot.
10% of the partners get the boot.
10% of the rank and file get the boot.

Yes, you can come up with this theoretically perfect group where everyone peforms equally well and everyone is better than the people not in the group. Doesn't happen in reality. Our lowest 10% are blockers. They are taking cool jobs from people who could do better. They are causing the rest of the group to work harder, they cause disruption.

Similarly, the best of our best should be rewarded commensurately. They should get the lion's share of the bonus dollars, the stock awards, the promos, etc. If anything, I'm frustrated that Microsoft does not more agressively differentiate. As a manager, i've tried hard to exceed my budgets so that there is very clear differentiation across the team. Sometimes, this has worked, othertimes I've been forced into very narrow ranges -- very frustrating.

The curve is not the problem -- its a great tool and its part of a solution. Believe me -- all of these companies we like to compare Microsoft to (google, etc.) strongly differentiate in their rewards to employees. This is a good thing. We are all following in the ways of GE here.

All of that said, we must demand that our managers take the process seriously, that we are objective, that people know where they stand throughout the year, etc. We do have weak management at Microsoft by and large. I believe the company is trying to do something about it, but it will take time. The key problem is that Microsoft is made up of a bunch of high performers with egos. It doesn't occur to them that management is hard, that leadership is harder, and that both are skills that must be developed through both training and experience.

...and, we should focus on managers people ratings and do things about it -- this does happen in at least parts of the company. I can tell you that it is very difficult to get a 3.5 or 4.0 in your people rating, and that the impact that this has on your overall compensation is directly tied to your role as a manager (e.g. lead of 2-3 people less of an issue, manager of managers, 80-90% of your score.

Also, most people probably don't realize what we have with our latest head of HR. Lisa has a long career at Microsoft as the head of product groups. She has relentlessly focused on management and people development within her organization, and is considered one of the top 5 managers in the company. Steve was very smart when he chose her to lead HR...Give her some time to work on the issues. I can guarantee that she will push very hard on improving how our managers manage. On holding them accountable, and on getting rid of the ones who should not be managing people.

Anonymous said...

"It doesn't occur to them that management is hard, that leadership is harder, and that both are skills that must be developed through both training and experience"

Yes, but you know, Microsoft doesn't have good managers, doesn't have a culture of management, doesn't train well, and at Microsoft the "good" manager or leader is a complete anomaly. So don't hoist yourself on your petard, managers at Microsoft basically suck, I have yet to have a good one, and historically their manager feedback would vouch for that.

fCh said...

[...]The ever-expanding-number-of interlocking-monopolies strategy is also at least one reason behind "integrated innovation."

I think most of the people here are taking the wrong approach. You can't straighten things out working from the bottem up if things are fouled-up due to a big strategic decision made at the top.



This is a posting coming from a perceptive individual--I hope you don't mind my saying something like this. Indeed, MSFT desire to get fast to ever-expanding-number-of interlocking-monopolies is part of any conversation in a very top-level analysis. Not being sure about the correctness of such a goal myself, I would like to ask a few (hopefully clarifying) questions:
Is it wrong to want to build "interlocking-monopolies"? Why?
Do you get to "interlocking-monopolies" by design or by accident?
How broad of a scope you'd like to have for an ideal set of "interlocking-monopolies"? In other words, is it a good idea to dream of a (operating) system spanning everything from mobile to games, to SOHO, and to enterprise?
How tight "interlocking-monopolies" does MSFT have?

Additional observation: When IBM was taken over by Gerstner, he proved most everybody wrong by not throwing away the big iron part of IBM's business. What should Ballmer (or his successor for that matter) learn? To play on one's strengths?

Cheers, fCh

Anonymous said...

I cringe whenever you talk about firing underperformers... in my mind, priority #1 should be to fire some of our "superstars." We have a bunch of these guys in my division who create new processes/tools/architectures that, at first blush, are good ideas but end up with monumental secondary costs in lost productivity, stability/quality, morale, etc. Meanwhile all management can do is rave about these superhuman 5.0 contributors.

Anonymous said...

Mini sort of gets this with his talk of Microsoft becoming lean and mean. But the question everyone needs to address is what business strategy goes with that.

You need to develop tools that make software developers more efficient.

Microsoft is never going to give up tied-selling and entanglement.

Anonymous said...

Also, most people probably don't realize what we have with our latest head of HR. Lisa has a long career at Microsoft as the head of product groups. She has relentlessly focused on management and people development within her organization, and is considered one of the top 5 managers in the company. Steve was very smart when he chose her to lead HR...Give her some time to work on the issues. I can guarantee that she will push very hard on improving how our managers manage. On holding them accountable, and on getting rid of the ones who should not be managing people.

The current system seems to have worked for her.

All she is going to do is figure out a way of convincing you that all the bull shit really isn't that bad.

You are going to get a lot of *stuff* like this:

So as a non-developer, non-Redmond female employee (lifetime review score of 4.2) let me offer another viewpoint.

No company is perfect.

Anonymous said...

"I do not want to work at any company that does not have a curve. We need to reward performance, individual performance."

You don't need a curve to identify top performers. The stack itself will identify who your top performers are. The curve is applied to 'put the stick' to people who are 'too far' away from the ideal set by the top performers. In other words, the curve is used to punish people.

The problem with the curve is that it doesn't even matter if the people at the bottom of the curve actually perfomed quite well... a certain number of people just have to get bad reviews. That just doesn't seem right to me.

Problem #1
In business you want to make the most of all your resources. Using a curve to punish people is a great way to demoralize them and hurt their performance. If you instead just (do what a good manager should) and get to know what motivates your people, then you can undoubtedly squeeze more performance from them.

Do you think the curve is a competitive advantage? No it isn't. It's just a simple, dogmatic measuring tool. The true competitive advantage is having managers that can get the most performance from their people.

Getting rid of the curve would allow managers to avoid assigning 3.0s to people that actually performed well and shouldn't be punished.

(It seems to me that it would be better to formulate an absolute scale from the previous year's data and measure people agaist that. That would at least give people something to continuously measure themselves against during the year to see what score they are tracking at. Although, maybe that's what the Microsoft Competencies are for?)

Problem #2
If you are going to rate people against their peers, then you should make the ratings/curve public. Everyone should see where they stand in the ratings and where everyone else stands in the ratings. I can't stand the political, subversive competition that the 'invisible curve' creates. Bring the competition out in the public eye so that people can explicitly make it a goal to learn from the people that are rated higher than them.

Problem #3
Can someone please explain to me how dropping the lowest 10% actually changes anything? Afterall, you're still going to have a normal distribution in every review period. The true competitive advantage comes from getting the most from your people so that even your lowest performers are high performers.

Anonymous said...

Can someone please explain to me how dropping the lowest 10% actually changes anything? Afterall, you're still going to have a normal distribution in every review period. The true competitive advantage comes from getting the most from your people so that even your lowest performers are high performers.

You don't actually have a normal distribution if HR and hiring managers are doing their job.

That's just an assumption used by management who, I'm guessing, don't believe they are doing their job when it comes to hiring.

They're giving themselves a "mulligan" on their hiring decisions.

Applying a curve every review period, over time, you end up firing more and more of the competent people in your organization.

Anonymous said...

"We need to reward performance, individual performance."

Agree. In my time there (5 yrs, lifetime 4.0), I saw far more pressure placed on high performers to slow down than on poor performers to catch up or get out. And even when you got a 4.0, your rewards rarely came close to the disparity in results achieved or hours expended. As such, self-motivation was a far greater driver for high performance than the formal reward system itself.

"We do have weak management at Microsoft by and large."

WRT middle mgt, I would agree. Snr mgt at the time I was there (left 01) was generally quite strong and experienced. In fairness to the middle-mgrs, too many were promoted from within while MSFT was just a desktop player and given little/no ongoing training. Hardly a recipe for success.

"Steve was very smart when he chose her to lead HR...Give her some time to work on the issues. I can guarantee that she will push very hard on improving how our managers manage. On holding them accountable, and on getting rid of the ones who should not be managing people."

My concern (as an ongoing shareholder now) is if Steve seemingly won't hold senior VPs accountable despite some pretty glaring performance problems, how is Lisa going to hold middle-mgrs accountable? Even if she does, isn't that an inconsistent and ultimately less than effective scenario? Accountability imo starts at the top and it's not clear to me that Steve's either taking it personally (Vista isn't delayed? The stock hasn't underperformed? The company is stronger than ever? There's no morale problem?) or handing it out. That's a problem. I also worry about the "give it time" part. How much more time can MSFT really afford to flounder around? Sure, it's still a giant but with 8% growth and competitors such as GOOG/AAPL/OSS hitting on all cylinders, does MSFT really have the luxury of years to get more effective? I really don't think so - not if it wants to continue being a leading player vs just a player.

Anonymous said...

Interesting facts about review model and how people get managed. I agree MS review is all about your manager's managers perception. I have a manager who makes opinions very fast and uses that opinion during review. I am lucky to be in his good books, and my try is always to make sure my reports are in his good books. I always tell my reports that they need to "manage that managers perception" and you will come out ahead in the review against your peers.

I think here in MS we dont foster enough team achievement. We need to have two rewards. One for team achievement and another for Individual contribution.

Been in the system for 10 years and have worked my ass off and got a 3.0 and then there has been one year, where my luck did some work that caught the VP's attentions(spent just 40 hours in writing that harness) and bagged a 4.5 with Gold star. I was surprised at that score as I did nothing good that year.

So I have been on both sides on the system, and now use that knowledge to guide my reports to get some decent scores and promotions.

Anonymous said...

"Been in the system for 10 years and have worked my ass off and got a 3.0 and then there has been one year, where my luck did some work that caught the VP's attentions(spent just 40 hours in writing that harness) and bagged a 4.5 with Gold star. I was surprised at that score as I did nothing good that year."

That my friend speaks to exactly why the system is broken. Not suggesting that breakthrough results are always a function of effort expended. But as you yourself seem to admit, this wasn't about the merit of what you did in that year but simply the fact that the right person noticed. I hope that when you say you're using "that knowledge to guide my reports to get some decent scores and promotions" the translation isn't teaching them how to game the system by managing the perception of their contribution vs the actual contribution - but somehow I doubt it. Sad.

Anonymous said...

Outside of the services org, the company has avoided the types of major layoffs that we've seen at competitors like IBM.

I've been at cocktail parties and out of work events where senior management has hinted that there was a need to cut headcount at MS, and that some sort of culling was definite in the near future.

But how to handle it and when to do it? Realistically, we need to wait until the products RTM. Also, mgmt needs to cushion the blow. The closest thing we've had to layoffs of any scale were in the services org during Saratoga, and atleast those folks were able to 'explore new opportunities' in other orgs.

So how to do it? I'm sure it was at that time one of the execs ran across Tom Sawyer on his kids' 'summer reading list' and had a moment of inspiration.

Unfortunately, we're not being tricked into painting a fence, we're being tricked into thinking that not only do we want layoffs - we *need* layoffs.

The number of people - not the management, not the integrated innovation cluster fuck - is the problem for all of our ills.

But we say we have the smartest people on the planet working for us. How could anyone possibly trick us into thinking that we need a layoff?

Bring in visceral subjects... like the ridiculous stack ranking. Get people all riled up. Have the value driven from the comments - of real (duped) employees. Build a sense of community, build a sense of connection with MiniMicrosoft. All the while, repeating a mantra that we need fewer people.

But it gets better - when the mainstream media gets duped, it's the coup de grace. That scored some a 4.5 on their review.

With this much success for the blog, does it make management a little more cocky? Too cocky? When you have VPs in various orgs talking about how they read MiniMicrosoft and actually advertising the blog to those unaware of it? Am I the only one who sees this for what it is?

There's a culling coming folks, and you've been duped into thinking it's good for you.

If there was ever any question about whether or not the company hires the brightest people, I think it's been settled.

Bravo!

Anonymous said...

"Bring in visceral subjects... like the ridiculous stack ranking. Get people all riled up. Have the value driven from the comments - of real (duped) employees. Build a sense of community, build a sense of connection with MiniMicrosoft. All the while, repeating a mantra that we need fewer people."

Culling is coming, you can bet on that one esp if performance doesn't radically pick up. But as regards mgt orchestrating some Oliver Stonesque conspiracy, I'd say you're reaching.

Anonymous said...

I've been at cocktail parties and out of work events where senior management has hinted that there was a need to cut headcount at MS, and that some sort of culling was definite in the near future.

Microsoft can't hire developers fast enough.

However, there is a push to automate testing as much as possible.

http://www.microsoft.com/billgates/speeches/2005/04-27MSRTechPanel.asp

"And the interest in the science has gone down quite a bit. Some of the research funding, in terms of how it's focused, and -- and in some cases, even going down, there's a big problem there. So, I'd say we're -- we're quite concerned that the U.S. will lose its relative position, here, in something that's very critical to the economy. To allowing this to be a country where, you know, our wealth is 'way ahead of that of other countries. For Microsoft, it means we're having a tougher time hiring, and as we look at the -- the future, that's just going to get tougher. The jobs are there, they're high-paying jobs, but we're just not seeing the pipeline what it needs to be."

Anonymous said...

"For Microsoft, it means we're having a tougher time hiring, and as we look at the -- the future, that's just going to get tougher."

I think his general comment is realistic at the macro level. But it's also self-serving. MSFT's specific problems with bureaucracy, long ship windows and a flat stock are making it harder to get new US recruits and therefore MSFT increasingly is importing more foreign workers and doing outsourcing/jv's overseas. Pointing to longer term macro educational issues is a convenient excuse for doing that. Note that GOOG doesn't appear to be having any problems finding qualified recruits and most consider their standards to be at least as high if not higher.

Anonymous said...

I don't know anyone or anything about Microsoft specifically, but if what I'm reading is accurate, you have a system for measuring individual performance that - by it's design - cannot possibly succeed.

Leave it to a company like MSFT to assign grade point averages to it's staff, and mandate what percentage of people will get what grades.

If you understand what has made great American companies GREAT, you understand the importance of the princple of meritocracies. Grading on a curve runs precisely contrary to this principle, because it doesn't allow for individuals to be measured against a fixed standard - it measures them *relative* to others.

Curve-based measurements are therefore innately unreliable and inaccurate.

That said, if you want to spend a whole lot of time developing "factors" that turn an inaccurate system into one that is somewhat closer to reality, go for it - it's like re-arranging the deck chairs on the titanic.

Read "Built to Last" or "Good to Great" - see if you find any instances of great American business institutions that evaluated employees using GPA's and a 'curve'.

Garbage in, garbage out.

Goodfella said...

I do not want to work at any company that does not have a curve. We need to reward performance, individual performance. If our managers are not using the system correctly, lets improve the management, not get rid of the system. Frankly, we should target 10% good attrition at every level of the company, every year.

10% of the VPs get the boot.
10% of the partners get the boot.
10% of the rank and file get the boot.


Aren't you being too extreme?
True it is good to reward star performers. But it doesn't mean that you need to punish performers who achieve less then stars. What's the point? If the person who is underperforming gets a boot what's all right but what about people who just don't want to bust their bacon 80 hours a week just because they have other things in life besides work? Leave only star performers in the team and watch how little will they achieve. Software industry is not only about genious - there is a good deal of needed but routine work - testing, servicing, non-critical component coding etc. Someone has to do it as well.

Tell me that bottom 10% of my group gets a boot at next review and I'll spend the rest of the time before review sending out resumes and interviewing. And I bet that I will not be the only one.

I'm sorry but your post seems so childish to me that I have hard time believing that you are a manager. Leader should motivate his/her subordinates to do best they can (however little that may be) (or if the best is not enough - let them go). But I fail to see how strategy that you propose will do anything but demoralize the team...

Anonymous said...

The "fire 10%" crowd have obviously never had to fire someone. It is difficult and time-consuming to build the proper, LEGAL, ethical case for it. If you're smart, and a decent human being, and trying to do the right thing for the employee by coaching and not giving up on them, it takes a LOT of time and effort. Which is also why the "managers should have at least 7 - 10 people reporting to them" crowd are pretty clueless too.

Anonymous said...

George Orwell said it best - "All animals are equal, but some animals are more equal than others."

During the past 10 years I have seen Microsoft's forced bell curve destroy good employees who cared about their customers, job and their work product, who did a good job, but had a crappy manager (insert interchangeable name here) and were forced into a 2.5 or 3.0 because of politics, and not results (and no, I never received either as a review score myself).

I am also former MSFT and also worked for Google.

Google's engineering culture is very good - but other areas of the company are run as poorly as Microsoft - full of poor performers, yes people, and those who survive only because they do nothing but smile.

And, at both companies, it was pretty easy to guess what those folks' review scores were - stellar :-)

Anonymous said...

I've been at MS nearly 10 years, and I think the bell curve sucks. I've got nearly a 4.0 lifetime average, so although I have benefited from it, I've seen it wreck so many people needlessly that it's just demoralizing. With stock options gone, stock awards paltry, and a "good" raise less than 3%, the incentives are not what they used to be in the 1990s. Consequently, I work way less. I did the math and realized I could work about 15-20 hours more a week and possibly get an extra $2-3K a year, and it just wasn't worth it. I get my work done and do a good job, but it's getting harder to talk me into going the extra mile when the rewards aren't there any more.

Anonymous said...

I cringe whenever you talk about firing underperformers... in my mind, priority #1 should be to fire some of our "superstars."

So true.

Long-term steady performance is much more valuable than the short-term hype perpetrated by the 4.5s. Our incompetent managers (themselves of the ‘flash in the pan’ variety) cannot tell the difference.

Getting rid of the curve will not solve anything either – we will have teams with a bunch of 4.0s but with abysmal market performance. Root cause (again): shoddy management.

I say allocate 4.0s to a product group based on how much they helped Microsoft grow earnings. If you did not add to shareholder value, you do not deserve a 4.0.